TNI TXAS rver NOVEMBER 15, 1991 VOLUME 83, No. 22 FEATURES The Duke of Louisiana By Lanny Keller 5 Bringing the War Back Home By Ammar Dashti 8 DEPARTMENTS Editorial Las Americas 13 Media, Observer 16 Books and the Culture Black Face on White Screen By Steven Kellman 18 Big Shots & Rogue Reptiles By Brett Campbell 19 Crisis in the Cities By Joe Feagin 21 Afterword Civics Lesson By Char Miller 23 Cover photo by Ammar Dashti. I F DEMOCRATS HOPE to salvage a campaign in the 1992 presidential election, they could do worse than resorting to an appeal to the pocketbooks of middle America. Sen. Lloyd Bentsen, D-Texas, stepped into the breach in the past few weeks with initiatives to provide health care for workers in small businesses and tax cuts for middle-income Americans. While President George Bush prefers to concentrate on global issues and equates domestic economic policy with a cut in the capital gains tax and incentives for industrial research and development, Bentsen, who chairs the Senate Finance Committee, offers a carrot to the workhorses of the economy. He proposes a five-year, $72.5 billion tax break for middle-income families, which he said would jump-start the economy by encouraging savings. The costs would be offset by cuts in military spending. Bentsen’s plan would allow families a $300 tax credit for each child. It also would restore tax deductions for individual retirement acyear. The plan would allow withdrawals before retirement for first-time homebuyers, college education costs or catastrophic medical expenses. A family of four earning $35,000 a year would get a tax savings of $600, on the average, or approximately one-fourth of its federal income taxes, he said. Nearly 80 percent of the benefits would go to families earning between $20,000 and $75,000. The group that used to form the backbone of the Democratic vote. In comparison, 82.6 percent of President Bush’s proposed cut in the tax on capital gains, or the profit from the sale of stock, real estate or other investments, would benefit people with more than $100,000 in annual income. In other words: the classic Country Club Republicans. Senate Minority Leader Robert Dole, RKan., called Bentsen’s tax plan a `nonstarter” because it reallocates cuts in the military, which would break last year’s budget deal. Rep. Dan Rostenkowski, D-Ill., chair of the House Ways and Means Committee, is said to be resisting the tax cuts this year. But less than a week after Bentsen floated his plan, tax cut fever was spreading through Congress, with at least five plans circulating in addition to what passes for the President’s plan. Not waiting to follow the lead of their President, Sen. Phil Gramm, R-Texas, and Rep. Newt Gingrich, R-Ga., proposed a plan that would cut the capital gains tax rate to 19.6 BILL LEISSNER Sen. Lloyd Bentsen percent from the current 28 percent. Their plan also would reinstate IRA tax deductions and give tax credits for firsttime homebuyers. They say the capital gains tax cut and the IRA expansion would raise money in the first five years. White House officials, reacting to the voter unrest about the economy, later reported the administration is considering some form of middle-class tax relief, but only as part of a package that includes a cut in the tax on capital gains. In other words, the middle class \(which has seen its share of the tax burden hostage to yet more tax breaks for the rich, who received huge windfalls in the infamous 1981 tax bill. If the Republicans don’t like Bentsen’s proposal, how about the plan of Sen. Albert Gore, D-Tenn., and Rep. Thomas Downey, DN.Y., to replace the $2,150 exemption for children under 18 with an $800 tax credit. To pay for it, they propose an increase in the top tax rate to 36 percent from the current 31 percent and a 15 percent surtax on individuals with adjusted gross incomes over $200,000 a year. Bentsen and other Democrats, playing the congressional version of “good cop” to the Gore-Downey “bad cop” team, have said they would consider cutting the capital gains tax to avert a threatened veto, but they should not worry. Bush might veto an extension of unemployment benefits for a few million workers who lost their jobs in the post-Reagan re cession, but he would not dare an election-year veto of a tax break for the largest mass of voters in the country. Democrats should put aside talk about fiscal responsibility and join the bidding war for the middle-class vote. Remember what happened to Walter Mondale in 1980 when he took the fiscally responsible position that taxes would have to increase to take care of the federal deficit? Rostenkowski, a Chicago pol, should know he is in the political equivalent of a knife fight. Let the Republicans take credit for pushing capital-gains tax breaks, but don’t let the Democrats take the fall for stopping a working-class tax cut. Votes in health caretoo Bentsen’s tax plan came a week after he proposed a short-term plan to make health care more affordable for small businesses. Bentsen noted that more than 34 million Americans and 4 million Texans have no health insurance and approximately 80 percent of the EDITORIAL Democratic Populism: It’s About Time THE TEXAS OBSERVER 3
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